2025 Crypto Crash: What Happened and How to Navigate Next

Yesterday’s crypto market lost $200 billion in market capitalization after U.S. President Donald Trump announced 100% tariffs on Chinese imports, effective November 1, 2025, plus export controls on critical U.S. software. Triggered by China’s rare earth restrictions, this disrupted crypto mining, EVs, and solar supply chains. Bitcoin (BTC) dropped 10% to $105,000, Ethereum (ETH) fell 15%, and $19.31 billion in liquidations affected traders. This guide breaks down the event and offers strategies to navigate the market with tools like those on Phemex.

Following yesterday’s price movements, opportunities emerge. Explore how to tackle volatility with Phemex—let’s dive in.

What Happened: Timeline of the October 10, 2025 Market Drop

The October 10, 2025, tariff announcement triggered a rapid market sell-off. Here’s the complete timeline:

Key Stats: CoinGlass reports 1.66 million traders hit by liquidations, with BTC at $5.36B, ETH at $4.42B, SOL at $2.01B, and XRP at $707.53M. The $19.31B total marks 2025’s biggest single-day wipeout.

Why It Happened: Tariffs, Liquidations, and Supply Chain Chaos

Trump’s tariffs disrupted China’s 14% share of BTC mining hashrate and 60% of global rare earth production. Mining hardware costs may rise, per CoinDesk analysis, pushing miners to sell BTC, similar to the 2018 trade war. A risk-off mood (Dow -2.5%, Nasdaq -3.8%) hit crypto hard, with stablecoin USDe dipping to $0.99, per Bloomberg.

Market Impacts

• Price Drop: BTC fell 10% ($118K to $105K); ETH slid 15% to $3,800; SOL and XRP dropped 20-30%. Other altcoins like Cardano (ADA) fell 35%, Chainlink (LINK) 38%, and Aave (AAVE) 40%.

• Liquidation Surge: $7B vanished in one hour; $19.31B total (87% longs), per CoinGlass.

• DeFi and Mining Strain: DeFi TVL fell 11.64% per DeFiLlama; Chinese miners may face hashrate reductions according to CoinDesk analysis.

Insight: Tariffs may raise U.S. CPI by 0.5-1%, per Bloomberg, potentially affecting Fed rate decisions. Indicators like RSI at 28, indicating oversold conditions, were seen in past market conditions.

Market Sentiment: Top Indicators Post-Drop

CoinMarketCap’s metrics show intense bearish pressure after the $200B hit and $19.31B in liquidations:

• Bitcoin Dominance: BTC’s market share surged ~3% to 63% in 24 hours as traders shifted to BTC, similar to 2018’s trade war (up 4%) and 2020’s COVID dip (up 6%).

• Crypto Heat Map: 75% of top 100 assets in red (losses >10%), with mining and China-linked tokens hit hardest, showing broad sell-off pressure.

• BTC RSI: Price momentum dropped to 28 (oversold), a level seen in 2018 and 2020 market conditions, per CoinMarketCap.

Action: Track Bitcoin Dominance and RSI to monitor sentiment shifts as trade talks evolve.

Historical Context: 2025 Drop vs. Past Market Shocks

The 2025 tariff shock echoes 2018’s trade war more than 2020’s COVID dip. Below is a comparison of key events, including the May 2022 LUNA collapse, which wiped out $45B when TerraUSD depegged.

Lesson: Past market events, like the 2018 trade war, showed varied recovery timelines. Monitor U.S.-China trade developments for market context.

Phemex Strategies: Master Volatility with Confidence

Markets swing, but Phemex keeps you steady. With 24/7 trading, robust liquidity, and top-tier security, we deliver unmatched stability. Volatility offers opportunities—trade smarter with clear, data-driven tools for capital efficiency, risk management, and strategies that adapt to any market. 

1. Protect Your Portfolio

• Why It Works: Protecting your assets is key during volatility, like the tariff-driven crash. Rebalancing and hedging reduce exposure to risk, while stop-losses limit losses. 

• Hedge with Futures: Use 1-5x leverage shorts on perpetual futures to offset spot market losses. Example: Hold 1 BTC spot and open a 1x short to lock in value if prices drop further. Risk: Leverage can amplify losses; start with low leverage. Explore Hedge Mode.

• Set Stop-Losses: Apply 5-10% trailing stops to exit positions automatically, reducing losses by up to 15% in volatile markets, per historical data. Example: Set a 10% stop on ETH to avoid panic selling during a dip. Risk: High volatility may trigger stops prematurely.  Learn how to set a stop-lose order. 

• Benefits: These steps prioritize risk protection, giving you stability and control, crucial for navigating uncertainty.

2. Grow with Dollar-Cost Averaging (DCA)

• Tool: Phemex Spot DCA Bot

• Why It Works: DCA spreads buys over time, reducing the impact of price swings and achieving better entry points, as seen in 2018/2020 dips (historical market data). It’s a low-risk way to build positions during volatility.

• How-To: Set a fixed amount (e.g., $100 weekly) for BTC or ETH; the bot buys automatically at market dips. Example: Invest $100 weekly in BTC to average out costs during a $105K-$120K range. Risk: Prolonged downturns may delay gains; maintain a 20% cash reserve.
  
  
• Benefit: DCA empowers you with a disciplined, data-driven approach to capitalize on market opportunities without timing the bottom.
  
  

Try Phemex DCA Bot

3. Trade Smarter with Futures

• Tool: Phemex Multi-Assets Mode for cross-margin efficiency.

• Why It Works: Pools assets like BTC and ETH as margin, reducing liquidation risk by allowing profits to offset losses. This proved effective in volatile markets, cutting risk exposure.

• How-To: Open 1-5x leverage positions using TradingView charts for precise entries. Example: Hold ETH spot and short BTC futures to hedge against tariff-related dips. Risk: Over-leverage can lead to losses; cap risk at 1% per trade.

• Benefit: Multi-Assets Mode boosts capital efficiency, letting pros execute complex strategies with confidence, even in a $19.31B liquidation storm.

Explore Multi-Assets Mode

4. Earn Passive Income

• Tool: Phemex Onchain Earn.

• Why It Works: Offers competitive APY on assets like ETH and SOL, providing steady returns during market swings.

• How-To: Pick an asset like ETH or SOL from your spot wallet and stake it into an on-chain protocol. No external wallet or fees—just a click.

•  Benefit: Staking delivers passive income, offering stability and opportunity without active trading.

Start Earning ETH & SOL rewards

5. Follow Top Traders

• Tool: Phemex Copy Trading.

• Why It Works: Mirrors moves of high-performing traders with low fees, historically outperforming in volatile markets, based on historical data.

• How-To: Select traders with strong dip-trading records, set stop-losses, and allocate funds to auto-copy their trades. Example: Copy a trader to capture opportunities in a BTC dip without manual analysis. Risk: Losses mirror trader performance; diversify across 3-5 traders.

• Benefit: Copy trading simplifies complex markets, empowering beginners with expert-led strategies.

Explore Copy Trade

6. Automate Your Gains

• Tool: Phemex Grid/Martingale Bots.

• Why It Works: Captures 5% swings in ranges (e.g., BTC $105K-$120K), with gains in past recoveries, based on historical data.

• How-To: Set price bands for 24/7 automated trades; bots buy low, sell high. Example: Run a grid bot in a $105K-$120K BTC range to profit from oscillations. Risk: Strong trends may reduce effectiveness; check weekly.

•  Benefit: Automation maximizes efficiency, letting you seize opportunities without constant monitoring.

Try Trading Bots

Looking Ahead: Navigate with Confidence on Phemex

The $200B market drop ties crypto to global trade risks. Phemex’s institutional-grade tools, like trading bots, multi-asset mode, hedge mode, on-chain earn, and proven reliability through robust liquidity and top security protection, support confident market navigation.

Navigate with confidence on Phemex: Sign up for $4,800 bonus, explore the built-in trading tools and start trading.